American Airline Group Inc Internal Assessment
These factors comprise of either internal or external forces where internal forces have their origin from the business composition and external forces are associated with outside factors that are not bound to the business but has affects. For internal factors, some include the administration and management, financial status and flow, marketing strategies, the evolution of the company, and many other businesses related internal factors. A company has the potential to achieve astronomical revenue through neutralization of weaknesses and investing in contemporary strengths. American Airline Group Inc. is no exception and has its strengths and weaknesses that have been achieved and needs to be addressed respectively (Archi, Aastha, Megha, Nivedita & Pallithara 2017). The company has extensive market and opportunities to add up to the company’s growth (Mergent Online, 2018 ).
The operational network of the American airline is extensively and strategically distributed around the globe. As measured by the revenue passenger miles (RPMs) and available seat miles (ASMs), American Airlines took a frontier ranking as one of the largest passenger airlines in the world. This rating increased the company trustworthy and public relations making it sound dependable and convenience which is a fact from their reports. For instance, in 2015 at the financial year analysis, 146. This is done through the spread of word of mouth where customers will refer other people to American Airline based on the services offered to them. This kind of services is commonly popular today and highly appreciated by many customers (Schmidt, 2016). Its other effect is increasing the customer brand loyalty making them much ahead.
Weaknesses of American Airline Group Inc. American Airlines has been faced with pricing vulnerability for a long time making it unable to compete with other ventures. The transportation cost is the major actor that customers consider first and when the variance is substantial compared to other entities, then they prefer those options. This is a diminishing factor to the company. American airline is a global brand that should have bases distributed beyond boundaries to potential states. However, this is not the case as some of the areas do not have access to the airline services. This has broadly affected the company’s passenger turnout as many will prefer options that are readily available to their vicinities hence reducing the revenue reap of the company.
The Financial Ratio Of American Airline Group Inc. and Delta Air Lins For 2017, 2016, And 2015. American Airline Group Delta Air Lines Date 12/31/17 12/31/16 12/31/15 12/31/17 12/31/16 12/31/15 Current Ratio 0. 5167 Long-Termdebt/ Capital 0. 3841 Debt/Equity Ratio 6. 1137 Return On Equity 48. 7143 Return On Tangible Equity -81. 9487 Return On Assets 3. 5181 Return On Investment 7. 6926 Book Value Per Share 8. From Figure 2 above, American Airline has taken the lead in the asset turnover ratio indicating that the profit margin of the company is lower compared to Delta Airline. This indicates that American airline borrows a lot from its assets to establish sale hence reducing the profit margin of the company and increasing the asset ratio (MyAccounting, 2018). The receivables turnover ratio is an accounting measure used to quantify a firm's effectiveness in extending credit and in collecting debts on that credit.
The receivable ratio generally has some variable implications on a business performance and outlook. A higher receivable turnover ratio indicates that a company is operating in a cash basis and its credit collection on accounts is efficient From Figure 3, it is clear that the receivable turnover ratio for the two companies has declined for the last three years (MyAccounting, 2018). Dut to this it has bee unable to fully control the regional jet market (Culen, Yamazaki & Chew 2012). 20 Pricing vulnerability when compared to other low-cost carriers which have made customers shift from their services to other terminals 0. 32 Weak financial position (decline in revenue led to negative income & increase in debt agreements &secured mortgage) 0. 18 American Airline has been unable to match the standards of Southwest in terms of low cost operating structure & profitability route schedule) 0.
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